Apple, Google Connect on iPhone

What's more, Google CEO Eric Schmidt is a member of Apple's board.

For his part, Schmidt is actively pushing Google into the mobile market. The company has released mobile versions of its email and mapping applications for phones running Java as well as operating systems from Microsoft (MSFT) and Palm (PALM).

Google is also working with Research In Motion (RIMM) and Helio , a joint venture between SK Telecom (SKM) and EarthLink (ELNK), to link GPS data to search results to help people find the closest stores, movie theaters and other locations while they're on the go.

The principal motivation is to put its search engine in users' hands wherever they happen to be. This could boost the volume of Google searches and its related advertising revenue.

Similarly, taking YouTube to mobile devices could increase the number of videos viewed, and hence lift Google's ad sales -- an area of heightened focus in the wake of the company's planned purchase of DoubleClick.

Google currently runs ads alongside of some videos on YouTube. Shortly after acquiring the Web site, Google and Verizon Wireless, a joint venture of Verizon Communications (VZ) and Vodafone (VOD), announced plans to format YouTube videos so they can be viewed on Verizon Wireless phones.

The iPhone adds another key mobile venue for Google, which clearly isn't wedded to the iPhone to satisfy its mobile ambitions (rumors have even surfaced this year that Google has mulled its own branded phone device). But the company is going to "hitch its wagon to the top [cell-phone] horses," says ThinkEquity analyst Jonathan Hoopes. ThinkEquity makes a market in Apple and Google shares.

Projections for iPhone shipments vary between 10 million and 15 million in 2008, and 25 million by 2009.

Even if sales falls short of these lofty levels, the iPhone would still be on pace to match shipments of Research In Motion's BlackBerry shipments, putting it safely among top Internet-ready phones that will include Google services.

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